You might have heard of the FHA’s rehab 203k loan and the Home Rehabilitation Mortgage Insurance Program. It provides FHA mortgage insurance on loans which combine home purchase and rehabilitation financing. The loan is typically called an FHA 203k rehab Loan.
Did you know that it also provides loans for rehabilitation and refinancing of personal property?
In addition to rehabilitating personal property, 203k rehab loans are available individuals, nonprofits and government development agencies interested in purchasing foreclosed properties in need of repair. The program aims to stabilize struggling neighborhoods through rehabilitation and refinancing.
Lenders like 203k loans because they are backed by the federal government, which means a much less risky a investment for them. Comfortable lenders is good news for consumers, and those consumers looking to refinance or rehabilitate their property should consider 203k rehab loans as a viable option.
You can find out more about 203k rehab loans at the Dept. of Housing and Urban Development’s (HUD) website, HUD.gov. Lenders that are certified to do FHA loans should also be able to do a 203k rehab loan.
New OCC Community Developments Insights Report Focuses on the FHA’s 203k Home Rehabilitation Financing Program
WASHINGTON — The Office of the Comptroller of the Currency (OCC) today published a Community Developments Insights report that provides bankers an overview the FHA’s 203(k) Home Rehabilitation Mortgage Insurance Program.
“The 203k loan Program is an important tool that can help mitigate a lender’s risk, while at the same time restore some of the nation’s foreclosed properties and help stabilize neighborhoods,” said Comptroller of the Currency John C. Dugan.
“HUD strongly supports OCC’s efforts to increase bank participation in the 203(k) Program. With so many bank-owned properties in need of repairs, this program offers a great way for homebuyers to finance both the purchase and rehabilitation of these homes,” said David Stevens, Assistant Secretary for Housing/Federal Housing Commissioner at the U.S. Department of Housing and Urban Development.
The 203k loan Program provides FHA mortgage insurance on loans which combine home purchase and rehabilitation financing. Loans to rehabilitate and refinance a borrower’s current resident area are also available under the 203k loan Program. The 203k loan Program is a tool for FHA-approved lenders to originate loans for individuals, nonprofits and government development agencies interested in purchasing foreclosed properties in need of repair. Compared to conventional purchase and rehabilitation products, 203k loans carry less risk to lenders since these loans are backed by the full faith and credit of the federal government.
The report provides a comprehensive overview of this program for lenders that may be considering expanding their product line with 203k loans. The report also outlines how FHA 203k loans would be evaluated under the Community Reinvestment Act.
The Insights report can be accessed on the OCC’s Web site at: http://www.occ.gov/cdd/203k_Loan_Program_Insights_Jul09.pdf.
Get more information on FHA 203k rehab loans.